IFRS and IPO underpricing: evidence from Italy

Maglio, Roberto; Petraglia, Maria Rosaria; Agliata, Francesco

doi:10.1504/ijmfa.2018.093458

Cited by 9 publications

(10 citation statements)

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“…Corporate governance has to deal also with the wealth of several other stakeholders, such as employees, customers, suppliers, local community, environment and society in general (Ayuso and Argandon ˜a, 2009;Spitzeck and Hansen, 2010). Therefore, many growing issues have been related to good corporate governance systems such as legislation, codes of best practices adoption, relevance of stakeholders, shareholders and their protection, identification of the management's role and responsibilities (Trequattrini, 1999;Lombardi, 2012;Maglio et al, 2018).…”

Section: The Impact Of a Sustainable Corporate Governance On The Audit Functionmentioning

confidence: 99%

Sustainable corporate governance and new auditing issues: a preliminary empirical evidence on key audit matters

Fera

Pizzo

Vinciguerra

et al. 2021

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Purpose This paper aims to investigate the relationship between the quality of internal corporate governance mechanisms and the audit issues disclosed by external auditors in their report, assuming the beneficial effect related to the adoption of a sustainable corporate governance system. Design/methodology/approach This paper investigates the impact of the International Auditing and Assurance Standards Board’s ISA 701 in the European context as a new auditing principle supporting the key audit matters (KAMs) in reporting and disclosing auditing activities. The analysis is carried out through a quantitative methodology using a sample composed of non-financial companies listed on the Italian Stock Exchange. Findings Empirical findings highlight that firms having a high quality and sustainable corporate governance system tend to have fewer KAMs arising from the audit process and then disclosed in the audit report. To ensure the reliability of the empirical analysis, the authors controlled for a set of variables that could affect the audit function and for the mediating role of the overall business complexity (as proxied by the firm size). Originality/value This study is of interest to academics, practitioners and regulators, as it highlights the role of a higher quality internal corporate governance on the perceived corporate riskiness and complexity. It contributes to the recent debate on sustainable corporate governance, corporate sustainability and auditing streams.

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Section: The Impact Of a Sustainable Corporate Governance On The Audit Functionmentioning

confidence: 99%

Sustainable corporate governance and new auditing issues: a preliminary empirical evidence on key audit matters

Fera

Pizzo

Vinciguerra

et al. 2021

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“…Although major corporate governance discussions started from the separation of ownership and control in organizations (Berle & Means, 1932;Jensen & Meckling, 1976), several growing issues involve good corporate governance systems such as legislation, codes of best practices adoption, relevance of stakeholders and shareholders and their protection, identification of the role of responsibility of the board and management (Lombardi, 2012;Maglio, Rapone, & Rey 2018;Trequattrini, 1999), and corporate social responsibility (Welford, 2007). In Italy, the capitalistic model is mostly composed of small and medium enterprises (SMEs) that usually retain the features of the family business, and the owner is generally the manager of the company (Lombardi, Trequattrini, & Russo, 2016;Maglio, Petraglia, & Agliata, 2018). Thus, the problems of agency between owners and managers (Homayoun, 2015;Jensen & Meckling, 1976) are reduced or eliminated, but those between majority and minority shareholders rise and increase (Noodezh, Amiri, & Moghimi, 2015).…”

Section: Corporate Governance and Corporate Sustainabilitymentioning

confidence: 99%

Exploring sustainable governance: Compliance with the Italian related party transactions regulation for the legal protection of minority shareholders

Maglio

Rey

Agliata

et al. 2019

Corp Soc Responsibility Env

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Regarding the development of sustainable governance systems, many regulators have issued and developed self-regulatory codes defining the characteristics and ideal features of government models. The adoption of codes of good governance could serve as a mechanism to increase the level of legal protection for minority shareholders.Thus, this paper aims to measure the effective compliance by Italian listed companies with the Italian Code's recommendations on related party transactions and to assess the level of legal protection for minority shareholders in the Italian stock market.Using a quantitative method, our findings suggest that FTSE MIB companies are effectively compliant and that public utilities companies are as well. We also carried out an ordinary least squares (OLS) regression and found that companies with a higher market value and a greater presence of independent and non-executive directors assure a higher level of compliance. We observed that widely held firms have a positive effect on the level of legal protection for the minority shareholders. Our paper contributes to enriching the sustainable governance models, and it is directed to academic and practical communities.

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“…In contrast, Byard et al (2019) replicated the work of Hong et al (2014), concluding that the IFRS could not reduce IPO underpricing, casting considerable doubt on the latter's methodology. Maglio et al (2018) found no relationship between the IFRS mandate and IPO underpricing for Italy using 142 IPO firms listed between 2000 and 2012. In contrast, Firth and Gounopoulos (2017) documented the increased level of IPO underpricing after the IFRS mandate in Australia for 282 IPO firms listed between 2001 and 2009.…”

Section: Why Was Saudi Arabia Chosen?mentioning

confidence: 88%

“…Capitalizing on the unique context of Saudi Arabia’s adoption of the IFRS, its legal institutional quality and cultural similarity with a wide spectrum of emerging economies, our study contributes toward research, policy and investment decisions in emerging countries in several ways. Specifically, it adds to the existing literature on the association between the IFRS mandate and the underpricing and long-term performance of IPO companies (Dorsman et al , 2010; Otero and Enríquez, 2012; Hong et al , 2014; Firth and Gounopoulos, 2017; Maglio et al , 2018). Apart from providing the first empirical evidence of the benefits of the IFRS for accounting information quality of IPO firms in emerging countries, this study makes two contributions to the research on accounting disclosure and IPO literature.…”

Section: Introductionmentioning

confidence: 99%

The short- and long-lived effects of IFRS mandate on IPO firms in emerging market economies

Jamaani

Alidarous

2021

JFRA

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Purpose This study aims to examine the short- and long-lived effects of the International Financial Reporting Standards (IFRS) mandate on the quality of reporting information of initial public offering (IPO) firms in emerging market economies. Design/methodology/approach The study used several difference-in-differences models for a sample comprising 102 Saudi Arabian IPO firms for 2003–2017. Findings It found that mandating the application of the IFRS had a significant short-lived but no long-lived effect on IPO firms’ information asymmetry. When information asymmetry was high such as in the primary market, the IFRS succeeded in alleviating the underpricing of IPO firms. Conversely, in the secondary market, with negligible information asymmetry, the IFRS was not beneficial for the long-term performance of companies in the IPO market. Originality/value This study is the first of its kind in the emerging market context and has important implications for IPO investors and analysts, IFRS-IPO researchers and policymakers in emerging economies. The results empirically confirmed that the IFRS mandate had solely a short-lived effect and no long-lasting impact, on the problem of asymmetric information in the IPO market. The effectiveness of the IFRS in producing quality financial reporting is contingent upon large-scale information asymmetry and vanishes when investors and analysts have abundant information about listed firms, even for emerging economies such as Saudi Arabia.

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IFRS and IPO underpricing: evidence from Italy

Cited by 9 publications

References 0 publications

Sustainable corporate governance and new auditing issues: a preliminary empirical evidence on key audit matters

Sustainable corporate governance and new auditing issues: a preliminary empirical evidence on key audit matters

Exploring sustainable governance: Compliance with the Italian related party transactions regulation for the legal protection of minority shareholders

The short- and long-lived effects of IFRS mandate on IPO firms in emerging market economies

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